A collective force of more than 67 organizations has united in an open call urging the world’s largest banks to cease financial support for new metallurgical coal production and expansions.
Spearheaded by BankTrack and Reclaim Finance, an open letter has been dispatched to 50 prominent banks, appealing for an end to conventional practices in this domain.
Metallurgical coal, accounting for 14 percent of the world’s coal, primarily serves the steelmaking industry where it undergoes refinement into coke—a critical component combined with iron ore in blast furnaces to produce primary steel, as highlighted by the Sierra Club.
Julia Hovenier, Banks and Steel campaigner at BankTrack, underscored the urgency of the situation, stating, “The green steel transition is already underway, but financial institutions continue to invest in metallurgical coal—a dead end for the global steel industry and for the climate.”
While several financial entities have implemented policies against thermal coal, only a meager nine institutions have adopted stances against metallurgical coal, revealed the Sierra Club.
Shockingly, the period from 2016 till date saw a cumulative financial backing of $557 billion from major banks to the 50 largest developers in the metallurgical coal sector.
Citing the International Energy Agency’s 2021 findings, the Sierra Club reported that although existing mines could satisfy coking coal demand until 2050, plans are afoot to elevate production capacities to 406 Mt per year—exceeding one-third of total consumption in 2021.
The open letter delineated the dire environmental consequences, highlighting coal as a prime contributor to greenhouse gas emissions, accounting for 40 percent of emissions in 2021. Furthermore, coal usage in the steel sector alone contributes 7 percent of global greenhouse gasses and 11 percent of CO2 emissions.
The coalition’s plea specifically urges banks to discontinue financial services dedicated to metallurgical coal projects immediately and commit to refraining from supporting companies involved in developing such projects without comprehensive closure plans aligned with a 1.5°C scenario.
The letter concluded by expressing gratitude to banks willing to halt coal usage and encourage partners in the steel industry to traverse the path toward carbon neutrality through advisory and transition finance.
